Red-tape victim fights back [South Bend Tribune, Ind.]

Sept. 30--SOUTH BEND -- When Shirley Fulton's husband died in 1992, he left no savings or insurance benefit to pay for a funeral.

The two had been estranged since she left Buffalo, N.Y., years earlier, but Fulton recalls struggling to borrow enough money to take care of her husband's estate -- and vowed not to leave the couple's sons in the same position when her time came.

So not long afterward, Fulton recalls, she bought a term life insurance policy through AARP.

For years, she has made monthly payments to the $11,000 policy, despite otherwise struggling to make ends meet. When she turned 79, she remembers, the company converted it into a whole life policy -- and then her rate rose to $93 per month.

The retired social worker and day-care owner took out a reverse mortgage in the mid-1990s to re-side her small home, she says. With Medicaid, Medicare and SSI, Fulton gets by on about $700 each month.

So when she opened a letter in June telling her that she has been assigned a "spend-down" of $195 per month before she would receive the rest of her Medicaid benefits, she was floored.

Already with about 10 medications for various health problems, payments on a hearing aid, food and utilities, she knew finding another $195 a month would be difficult. "I have no money at the end of the month. How will I live? I have no idea."

Tracking down the 'spend-down'

Medicaid is the state-administered federal poor-relief program for those who qualify, which in addition to income limits includes an asset limit of $1,500. If a person's assets rise above that, he or she is no longer eligible for Medicaid -- unless medical costs are high enough to mitigate the increase in income enough that a "spend-down," like a deductible, is paid toward those costs first.

What Fulton did not realize was that her insurance policy's "cash surrender value" had quietly climbed to a little more than $1,600 this year. And the first state notice she received did not make clear that was the reason for her new spend-down.

After calling the Family Social Services and Family Administration, Fulton learned the policy, which listed two relatives as beneficiaries, was the culprit. After the agency acknowledged Fulton had not been sent earlier notice of the spend-down, Fulton says, FSSA agreed to postpone the change to allow an appeal.

When the 82-year-old contacted a Tribune reporter a few weeks ago, a Sept. 7 hearing was set. That was postponed to allow Fulton to explore other options with the policy.

A Tribune reporter made several phone calls on Fulton's behalf -- including to representatives from Legal Services, AARP and The Arc of Indiana -- and was told the decision didn't make sense: Yes, the larger cash value from the policy was higher than what is allowed, but those circumstances usually result in fewer benefits, period -- not a spend-down.

An FSSA spokesman in Indianapolis did not return several requests over two weeks for information about spend-downs generally or Fulton's case specifically.

But toward the end of last week, Fulton received a letter from FSSA telling her she will not have a spend-down after all -- but that she's eligible for fewer benefits.

"A review of your case recently took place because you reported a change in your circumstances or because of an internal administrative action," the letter reads.

Fulton has already filed an appeal of that decision, too. But it isn't the first time she decided to stand up for herself and others.

'I can't take any more'

Shirley Fulton lived with her husband, James, and their four sons in Buffalo. By 1969, the city where she was born and raised was burdened by riots and a high crime rate.

Still, she and her husband worked hard that year, saving a little to buy some hidden-away Christmas presents for the children.

Fulton remembers running out Christmas Eve for one last present, coming home to find the place ransacked.

It was like a scene from "How the Grinch Stole Christmas." The thieves stripped the house of not only the presents, but also food from the refrigerator, towels from the bath, sheets and pillowcases from beds.

"I said, 'That's it. I can't take any more,' " Fulton says now.

She brought some of the children to South Bend with her, selling her car to buy a house and finding work as a janitor at the State Theater.

She was on her knees polishing the brass on the theater's front door when she caught a glimpse of herself in the glass. She remembers saying to herself, "What are you doing? Get off your knees!"

The only times she's worked on her knees since have been as part of her work with children.

At the age of 47, Fulton began studying at Indiana University South Bend, ultimately earning four degrees, including in criminal justice and public and environmental affairs. But she says what captured her heart was social work.

Over the years, Fulton has worked for Ducomb Center, the halfway house for those released from prison; the Boys & Girls Club; the YMCA; with children and senior citizens as part of REAL Services; with the down-and-out of the Center for the Homeless; and then a day care she opened with a grant she sought after seeing the need for working mothers in her neighborhood.

She finally retired about five years ago after hurting her knees while lifting children. She's active in her church, Pentecostal Cathedral Church of God in Christ, and as vice president of the Rum Village Neighborhood Association.

Her son Theo helps her with grocery shopping and other errands. And he has helped his mother figure out what was behind the changes in her income.

'Takes care of her own'

The Rum Village connection allowed Shirley and Theo Fulton to speak with their state representative, David Niezgodski, D-South Bend, at a recent neighborhood picnic.

Niezgodski says he hears frequently from seniors having trouble making ends meet nowadays.

He recently had to sell an aunt's home in Wisconsin as part of the process of establishing her in a nursing home there, because of the maximum of $1,500 per person allowed in assets before receiving state aid.

"It's very difficult," he says. "People are very, very uncertain. ... We've got to protect them."

Niezgodski says that when the General Assembly begins its work again early next year, legislators will have to look closely at restoring some budget cuts that went too deep.

"We're going to absolutely have to see change next year," he said. "It has to be something that is non-political."

The state representative says he has learned, for instance, the administration has dealt another blow to the Healthy Indiana low-cost health insurance plan, which is no longer taking clients and whose waiting list is long.

Because an FSSA spokesman in Indianapolis did not fullfill several requests for information, The Tribune was not able to determine the status of the state insurance program.

Fulton, meanwhile, turned the ownership of her life insurance policy over to Alford's Mortuary in South Bend, which happens to be owned by her pastor.

The Rev. Donald Alford Sr. says the poor-relief regulations -- which could effectively punish those trying to provide for their own burial costs -- prompt many to involve a funeral home.

"We have people do that all the time," Alford says of creating irrevocable trusts that prevent the policy from being liquidated. Another advantage is people can insure the type of funeral and burial they want, down to the headstone, flowers or even the after-funeral luncheon.

Fulton "takes care of her own and is very independent," her pastor says.

'I'm not alone'

Carie Schenk, an elder law attorney for the South Bend office of Legal Services, says transferring a life insurance policy to a cemetery or funeral home is a perfectly legal way to lower assets.

Legal Services is a federal program that provides free civil legal aid to those older than 60 or who meet low-income requirements, Schenk says.

Medicaid often makes mistakes -- "there's such an enormous amount of documentation" -- so seniors should fight their natural reluctance to ask for help.

"What Mrs. Fulton is going through is a fairly simple issue," the attorney says of her confidence that FSSA will restore the older woman's benefits.

But her office is seeing a huge increase in local senior citizens losing their homes because of mounting debts they've been reluctant to seek help for.

"I think it's a generational thing," Schenk says. "They can't bring themselves not to pay off what they owe."

A younger generation, not feeling the same obligation, will eventually negotiate lower payment deals, but too often by the time an older person seeks help, Schenk says, their homes are being foreclosed.

"By the time I've seen them, they've gone without food or medicine to pay off some silly debt," Schenk says.

Fulton, too, finds herself encouraging senior citizens to seek the help they need. So although her issue might be resolved -- she's awaiting response from FSSA -- she encouraged a reporter to write her story anyway "because I'm not alone in this."

" 'Weren't you willing to pay into the system to give people a better life?' " she says she has asked seniors she's worked with, who reply in agreement. " 'Then get some of it back!' You'd be amazed at how many people I gave that speech to."

Contact Virginia Black:

574-235-6321

[email protected]

facebook.com/tribune.virginiablack

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